WeVote
Log In

Bill

ME

Bill

SB 1241

SB 1241 - For all tax years beginning on or after January 1, 2026, this act authorizes an income tax deduction for the first $25,000 in tipped income, as defined in the act, earned by a taxpayer. This act is substantially similar to HB 1670 (2026) and HB 2173 (2026). JOSH NORBERG

2026 Regular Session Introduced by Mary Elizabeth Coleman

Missouri bill creates income tax deduction for tip earnings, providing tax relief to tipped workers while potentially reducing state revenue depending on deduction scope.

Second Read and Referred S Economic and Workforce Development Committee
0
WeVote Research Nonpartisan
Bill Summary · SB 1241

Legislative bill overview

SB 1241 would create a state income tax deduction for wages earned through tips in Missouri. This allows tipped workers to exclude a portion or all of their tip income from Missouri state income tax calculations. The bill is currently in the Senate Economic and Workforce Development Committee.

Why is this important

Tipped workers often face tax burdens on income that may be inconsistently reported or earned in cash, and this deduction could provide financial relief to a workforce that typically earns lower base wages. However, the tax revenue impact on the state budget depends on the deduction's scope—whether it applies to all tips or only certain amounts—which is not specified in the bill summary. This could affect funding for state services if revenue declines substantially.

Potential points of contention

  • Tax fairness debate: Non-tipped workers may view this as preferential treatment, raising questions about why one occupational group receives special deductions others don't
  • Revenue loss uncertainty: The fiscal impact on Missouri's budget is unclear without knowing the deduction's parameters, potentially affecting education, infrastructure, and other state programs
  • Compliance and administration: Determining what qualifies as "tipped income" for tax purposes may create accounting complexity and auditing challenges for both workers and the state

Compiled from official sources — confirm details with the bill’s official record.

Sign in to ask a question.